Requirements1.Compute the overhead variances for the month: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance.Explain why the variances are favorable or unfavorable.2.Requirement 1. Compute the overhead variances for the month: variable overhead cost variance, variable overhead efficiency variance, foxed overhead cost variance, and foxed overhead volume variance.Begin by selecting the formulas needed to compute the variable overhead (VOH) and fioxed overhead (FOH) variances, and then compute each variance amount.Actual overhead - (Actual hours x Standard price)(Actual hours - Standard hours allowed) x Standard priceActual overhead - Budgeted overheadBudgeted overhead - Allocated overhead= VOH cost variance%3DData Table= VOH efficiency variance%3D|= FOH cost variance= FOH volume variance Data tableStatic budget variáble overhead7,800Static budget fixed overhead$43,900Static budget direct labor hours1,300 hoursStatic budget number of units5,200 unitsWatson allocates manufacturing overhead to production based onstandard direct labor hours. Last month, Watson reported thefollowing actual results: actual variable overhead, $10,500; actualfixed overhead, $2,770; actual production of 6,800 units at 0.30direct labor hours per unit. The standard direct labor time is 0.25direct labor hours per unit (1,300 static direct labor hours / 5,200static units).%24

Name: Requirements1.Compute the overhead variances for the month: variable
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Description: Requirements1.Compute the overhead variances for the month: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance.Explain why the variances are favorable or unfavorab

Variance analysis involves computing of the deviations by comparing the actual and estimate data and…

Business

Accounting

Data table Static budget variable overhead 7,800 Static budget fixed overhead %24 3,900 Static budget direct labor hours 1,300 hours Static budget number of units 5,200 units Watson allocates manufacturing overhead to production based on standard direct labor hours. Last month, Watson reported the following actual results: actual variable overhead, $10,500; actual fixed overhead, $2,770; actual production of 6,800 units at 0.30 direct labor hours per unit. The standard direct labor time is 0.25 direct labor hours per unit (1,300 static direct labor hours / 5,200 static units). %24

Data table Static budget variable overhead 7,800 Static budget fixed overhead %24 3,900 Static budget direct labor hours 1,300 hours Static budget number of units 5,200 units Watson allocates manufacturing overhead to production based on standard direct labor hours. Last month, Watson reported the following actual results: actual variable overhead, $10,500; actual fixed overhead, $2,770; actual production of 6,800 units at 0.30 direct labor hours per unit. The standard direct labor time is 0.25 direct labor hours per unit (1,300 static direct labor hours / 5,200 static units). %24

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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